Three Who Thrived After Early Gaffes

By

Joann S. Lublin

Updated May 4, 2010 12:01 a.m. ET

A youthful indiscretion haunts Jeffrey Hollender every time he visits Canada.

He gets detained for extra security screening because of an incident in 1978 where authorities arrested and deported the then 23-year-old American for operating an adult-education school in Toronto without a work permit. Yet the career setback—and the subsequent soul-searching—proved a springboard for his eventual success. He co-founded and ran Seventh Generation Inc., a leading maker of environmentally friendly household products based in Burlington, Vt.

ENLARGE

Jeffrey Hollender
Andy Duback for The Wall Street Journal

Mr. Hollender is hardly unique. For Peter G. Peterson, the billionaire co-founder of Blackstone Group LP,BX-0.10% a New York private-equity firm, it took an expulsion from the Massachusetts Institute of Technology and a stint as a department store employee to finally realize what he wanted to do. Myron E. Ullman III, chief executive of J.C. Penney Co.JCP-0.24%, was a 30-year-old university business officer when he was involved in mishaps that landed his new boss in an emergency room twice in two weeks.

All three gleaned lessons from their early stumbles that helped them thrive later. Their experiences offer a road map to anyone discouraged by initial missteps. "Early setbacks represent a key developmental event that successful executives cite when they look back over their careers," says Ellen Van Velsor, a senior fellow at the Center for Creative Leadership in Greensboro, N.C. The center has studied the role of setbacks in future success for decades.

To rebound from early mistakes, you need time to reflect constructively, as Mr. Hollender did. The college dropout had begun his nonprofit Skills Exchange in 1977. Classes ranged from sushi preparation to poetry writing. He didn't obtain a work permit because "I was totally obsessed with work" to obtain the permanent Canadian residency status required. Mr. Hollender never equated his deportation with failure. "It caused me to begin to re-examine what really matters," he says. He spent months in contemplation while cutting trees on a cousin's ginseng farm in Vermont.

ENLARGE

Myron E. Ullman
Matt Nager for The Wall Street Journal

The entrepreneur next created a New York venture called Network for Learning, with offbeat classes such as "The Art of Flirting." This time, however, he aimed to make money. "If you are going to invest your time, passion and energy, you should do it as a for-profit business," Mr. Hollender says. Network for Learning quickly grew, attracting 60,000 students and turning a profit by its second fiscal year. Mr. Hollender sold the business to a Warner Communications unit for more than $2 million in 1985. Four years later, Mr. Hollender and partner Alan Newman raised money for a failing mail-order catalog that peddled environmental products. They renamed it Seventh Generation, where Mr. Hollender, 55, now is executive chairman.

Mr. Peterson's early setbacks persuaded him to set higher ethical standards and heed his gut instincts. M.I.T. kicked him out in fall 1944 for plagiarizing another student's term paper. He believed he didn't cheat because he had revised it and added much of his own information. The humiliating expulsion made him realize he should avoid "self-serving rationalizations about questionable behavior." He instead asked himself: "What would a person I admire greatly think about this behavior?" That's why "I have somehow managed to stay out of trouble ever since," he continues.

After graduation from Northwestern University in 1947, the marketing major was hired as an assistant toy buyer for a department store in Portland, Ore. He quit four months later because he hated retailing. "I had made a serious mistake," he says.

During a three-day drive to Chicago, where his fiancée was going to school, he says he kept thinking: "What [do] I really enjoy doing?" He concluded his keen analytical ability qualified him for market research. He joined a small market-research firm, earning $50 a week. The concern promoted the junior analyst to executive vice president within two years. He later was an adman at McCann-Erickson, CEO of electronics maker Bell & Howell Co., President Richard Nixon's commerce secretary and head of Lehman Brothers.

ENLARGE

Peter G. Peterson
Bloomberg

Mr. Peterson co-launched Blackstone in 1985. He says he insisted the firm do no equity research or hostile takeovers because he felt those activities unethically conflicted with clients' interests. Otherwise, "you weren't dealing straight with these people," he says. The decision reflected his post-M.I.T. belief "in the need for honesty and integrity," he adds.

For Mr. Ullman, twin injuries suffered by his supervisor propelled him to perform better on the job. He was chief business officer for University of Cincinnati when Henry Winkler became acting president in summer 1977. Weeks later, the two men and their wives decided to drive together to a football game.

Mr. Ullman was standing by his wife when she slammed the car door on his boss's hand. Mr. Winkler says the bad bruise incapacitated him for two weeks. The day they resumed their regular racketball game, Mr. Ullman hit Mr. Winkler—who had ducked behind him—with his racket and gave him a black eye. "I am not sure I can survive working with you," Mr. Winkler recalls joking at the time.

"I have a lot to prove that I am not a risk," Mr. Ullman replied anxiously. As a result, "there's no question I worked my butt off," he says. "I earned his respect for other than my ability to hurt him."

Mr. Ullman, now 63, says his recovery efforts deepened his ties with his boss. Mr. Winkler often helped by taking the heat when Mr. Ullman needed more budget funds or persuading colleagues to assist him. This taught Mr. Ullman, who held top jobs at several retailers before taking command of Penney in 2004, a powerful leadership lesson: "If a boss focuses on making colleagues successful, they have a better chance of succeeding."

Mr. Winkler says Mr. Ullman proved he "was first rate." The young administrator soon earned a vice presidency, thanks to lobbying by his boss.

Mr. Winkler was among "the most important mentors in my career," concludes Mr. Ullman.

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